Turn up, take a seat and watch the action. Who said footy is the only entertainment in town. The ending to this auction was high drama and left the crowd wondering what actually happened. 21 Maple Crescent, Camberwell. Doug McLauchlan and Stephen Gough, under the hammer, $3,060,000, 2 bidders.

At 6.00pm the James Spring 100 Auction Clearance Rate for $M+ Inner Melbourne family homes was 53% over the 3-week market test period (Aug 25, Sept 1 and 8).

Last week our heading was Wipeout – it was a shocking day on the streets (31%) – today (66%) the results are a bounce back to the previous week (61%) = 53% overall.

The logical conclusion would be to say the market is volatile – but we think not (it’s picky yes, unpredictable no) – we think the market is flattening. The fall is easing, but yes, we are still falling (overall).

The key for the rest of 2018 will be market pricing, stock quality and the stale rate.

We think last week’s dramatic fall was a statement about poorer stock, incorrect market pricing, combining with a bit of a statistical anomaly, which is possible as bidder numbers are now so low.

If you don’t price to market you are simply not selling – when you are cold on price, you are freezing.

Today we saw better stock, better pricing and a better clearance rate. It’s a fine line at the moment.

Firstly, we have a new No. 1 market influencer – geographically.

Stonnington (Toorak) has clearly returned to the top, after a decade in second place as Melbourne Top End Driver/Influencer.

Boroondara is on the slippery slope falling to No. 2, then Bayside, Inner North and the West as Melbourne’s Top End Market Drivers – with the Peninsulas the wild card influencers from time to time.

Some will say Stonnington (in particular, Toorak) was always No. 1 and for many years it was (along with Bayside Brighton/Albert Park) – but in 2008 with the Chinese money surge via student visas and FIRB changes, Stonnington slipped behind Boroondara as Melbourne’s No. 1 market influencer.

Between 2008 and 2016 what happened in Kew, Canterbury and Balwyn drove the Top End market via the insatiable demand for Chinese people to be near Melbournes elite private schools and their existing communities.

Toorak turned into a follower through sheer weight of numbers and it was daylight to Brighton languishing in third, as there was minimal demand from Chinese people in the Bayside area.

Since 2012, Stonnington has begun to reclaim some ground towards the No. 1 mantle, in part due to more locals recognising Toorak as value for money when land prices were near parity with Balwyn and in part due to more Chinese people also buying in Toorak.

However, the Stonnington rise really took off in 2017, when the good Toorak agents and more business savvy sellers recognised the winds of change (less and more difficult Chinese money) and went to different methods of sale, staggered deposits and longer, even 12 months settlements to accommodate – they moved with the times.

Boroondara agents and sellers as a general rule did not and still have not recognised things are different and so spring 2017 has confirmed there is now a “new world order” of influence in Melbourne’s Top End, with Stonnington in particular, Toorak/Armadale/Malvern now firmly back at No. 1.

Secondly, there has been a very big fall in clearance rates and bidder numbers from spring two years ago

and from spring last year to spring today (we use the same 3-week period).

Thirdly, the fall appears to be flattening from May 2018 to spring 2018

when we compare our 3-week, 100 Auction tests.

BUT and it’s a very big BUT… the market in May was on the surface weak (see below) so it couldn’t fall much further, May (57%/1.3 Bidderman) to spring (53%/1.1 Bidderman).

Bidderman is now averaging 1.1 (bidders per auction) which is not high enough to see a solid market.

Bidderman needs to be consistently over say 1.5 and towards 2.0 bidders per auction to be a solid or improving market.

A complicating factor will now be the MARKET CLAG – Clag as in glue.

The market will slow and prices will drop even further when there is a High Stale Rate – that is, passed-in properties remaining unsold (CLAG).

Last week an incredible 24 of the 35 properties passed in.

So we followed those 24 up today and only 5 of them have since sold – meaning the one-week stale rate is 79%.

If the stale unsold rate remains this high for lengthy periods, then more and more unsold homes will CLAG up the market, forcing prices across the board down further, as those sellers become keener on a sale and buyers have more choice.

Finally, over the footy final weeks there is increased stock and increased trophy homes, so you will see better headlines

highlighted by the cherry-picking of good results over not so good results.

However, the headlines could well be misleading for the Ducks and Lone Rangers figure was a massive 69% or close enough to 7 from 10. That means only 3 in 10 auctions were actually auctions, 7 in 10 were not, as there was no multiple bidding.

When you analyse that – it’s an incredible auction or non-auction stat.

C’mon Bucks, Go Pies – there’s next week!

This week again self-serving to a degree, but on high quality, A-Grade homes the reality of what our clients are experiencing is not the same as the overall stats.

This provides anecdotal and additional support to the graphic below on A, B and C-grader price movements.

Three clear things that you don’t see in the stats:

A. If you don’t price correctly, no matter how good a home you have, you will almost certainly not have a sale. If you do price correctly and you have a good home, you will have a good chance at a sale.

B. The A-grade segment is different from the rest of the market. However, A-grade means all three P’s are good (Position, Property AND Price).

C. Strategy – We often get asked why should we use an advocate to buy and sell. Our answer is simply to get the result you really, really want. This week both the homes we bought were dogfights based on a specific bidding strategy that proved successful in the end and both homes we managed to sell, had singular bidding, requiring different strategies – it wasn’t about marketing and auctions.

Buy and sell in our opinion works best in this market when you have an overall (good) strategy and poise – some will disagree – but above are our results and above those are the overall market’s results – you make your own decisions.

Top 3 PPP’s (Price, Property, Position) we have learnt about our markets!

Position – Melbourne’s once Market Driver, Boroondara (Kew and surrounds) has had the greatest price falls, particularly on land values – due to its exposure to the Chinese market and has been replaced by Stonnington (Toorak and surrounds) as Melbourne’s No. 1 Top End market influencer.

Property – the renovator’s delight (with a heritage overlay) – once highly sought after, is now in many cases ignored, as building costs and perceived council delays and uncertainties, have made ownership far more difficult.